Mortgage loans hit a new record high in July due to surging demand for housing finance as the local real estate market bounced back.
According to a report released by the Bank of Korea (BOK), Wednesday, the total volume of mortgage loans in the banking sector stood at 1,068.1 trillion won ($812.1 billion), reflecting a month-to-month increase of 6 trillion won. Registering an upward trend for the fourth consecutive month, July’s surge was the most substantial since September 2021.
A significant factor behind this record-breaking increase is housing loans. The balance of such loans in the banking sector reached 820.8 trillion won, with a 6 trillion won month-to-month jump, marking the largest growth since July 2021.
Market analysts believe that the recent surge in apartment transactions is prompting people to secure funds for home purchases, anticipating notable financial gains might be made in the event that the market fully rebounds.
“Mortgage loans are surging due to the recent rise in apartment transactions, primarily in the capital area,” said Yoon Ok-ja, a senior official from the central bank’s financial markets departments. “Since an uptick in apartment sales typically leads to mortgage enactments with a 2- to 3-month lag, we foresee sustained demand for housing finance.”
The Ministry of Land, Infrastructure and Transport reports that apartment sales remained consistent this year, increasing from 35,000 units in March to 36,000 units in June.Source: Korea Times
